Beef prices buoyed by cutthroat competition in meat market

(Copyright/Wavebreak Media)
(Copyright/Wavebreak Media)

If the Fourth of July just isn’t a holiday without a burger on the grill, you’re in luck.

The latest survey of food prices in Arizona shows that shoppers can find ground chuck at just two-thirds the price it was two years ago.

Not interested in red meat? Chicken breasts also are far cheaper now than they were as recently as last year.

And if you like egg salad, a glut on the market is also driving down prices.

“It’s hamburger time for everyone,” quipped Julie Murphree, spokeswoman for the Arizona Farm Bureau Federation which conducts the quarterly surveys.

So what’s driving down prices?

Murphree says some of that involves the normal laws of supply and demand.

That’s the particular case with eggs, she said, citing conversations with the Hickman family which is a major egg producer in Arizona.

“They have said that prices have been way too low,” she said.

“We are overproducing right now,” Murphree said. “And in summer, sometimes, demand is not quite as high as it is, especially in the fall when we’re starting to ramp up a lot of baking and stuff.”

As to those beef prices, Murphree said there’s a good supply on the market. She also said that ranchers are figuring out ways to deal with the high feed prices which had driven the cost of red meat into areas where some shoppers were choosing alternatives.

But there’s also something else at work.

Murphree said Arizona has one of the most competitive — some would say cutthroat — competition in the grocery industry. Even with the consolidation that’s occurred during the past few years, she said supermarket chains feel the need to keep prices as low as possible to retain customers.

That competition played out during the past few days on the stock market.

Kroger Co., owner of the Fry’s grocery chains that have a major presence in Arizona, saw the price of its stock drop by about 25 percent. And that wasn’t helped at all by the decision by Amazon to purchase Whole Foods, setting the stage to make that much smaller chain a major competitor.

The bottom line is the survey found the cost of a market basket of 16 typical items this quarter was $46.06. That compares with $49.26 for the same quarter last year.

Of note is that prices generally remain below where they were two or three years ago, even with the effects of inflation.

The survey is done by Farm Bureau volunteers who check local grocery stores and look for the best prices on the list. The costs reflect sale items but do not take into account other bargains that may be available to shoppers, either from using digital or printed coupons or being a member of a store’s “affinity” network which provides further discounts.

Item | 2nd quarter 2017 | 2nd quarter 2016:

Red delicious apples (pound) | $1.59 | $1.33

Russet potatoes (5 pounds) | $2.39 | $2.81

Ground chuck (pound) | $2.86 | $3.77

Sirloin tip roast (pound) | $6.76 | $6.98

Sliced deli ham (pound) | $3.61 | $3.51

Bacon (pound) | $4.74 | $4.49

Boneless chicken breasts (pound) | $3.21 | $4.36

Whole milk (gallon) | $1.96 | $1.95

Shredded mild cheddar cheese (pound) | $4.49 | $3.81

Grade A eggs (dozen) | $1.43 | $1.69

All-purpose flour (5 pounds) | $1.98 | $1.86

Orange juice (1/2 gallon) | $2.62 | $2.89

Vegetable oil (quart) | $1.82 | $2.65

American salad mix (pound) | $2.79 | $2.79

Toasted oat cereal (8.9 ounce box) | $2.50 | $3.13

White bread (20 ounce) | $1.31 | $1.24

— Source: Arizona Farm Bureau Federation

Market basket of 16 selected basic items:

2017: 1st quarter – $49.16; 2nd quarter – $46.06

2016: 1st quarter – $51.20; 2nd quarter – $49.26; 3rd quarter – $48.72; 4th quarter – $47.07

2015: 1st quarter– $50.29; 2nd quarter – $50.88; 3rd quarter – $54.57; 4th quarter – $51.15

2014: 1st quarter – $52.40; 2nd quarter – $52.64; 3rd quarter – $50.88; 4th quarter – $53.02

2013: 1st quarter – $49.75; 2nd quarter – $47.97; 3rd quarter – $50.87; 4th quarter – $51.62

2012: 1st quarter – $50.79; 2nd quarter – $51.19; 3rd quarter -$49.25; 4th quarter – $50.54

2011: 1st quarter – $47.85; 2nd quarter – $51.31; 3rd quarter – $50.71; 4th quarter – $51.39

2010: 1st quarter – $45.96; 2nd quarter – $48.84; 3rd quarter – $46.48; 4th quarter – $45.44

2009: 1st quarter – $54.43; 2nd quarter – $50.89; 3rd quarter – $46.02; 4th quarter – $45.89

(All figures in actual dollars at the time, not adjusted for inflation)

— Source: Arizona Farm Bureau Federation

Compromise made on egg freshness legislation

(Photo by Preston Keres/U.S. Dept. of Agriculture)
(Photo by Preston Keres/U.S. Dept. of Agriculture)

What’s the difference between a Grade A egg and one that’s labeled Grade AA?

Pretty soon it could be as much as three weeks.

The state Senate this week gave final approval to legislation that allows Grade A eggs to remain available for sale for up to 45 days after they were packed. That’s nearly twice as long as currently permitted.

In fact, the cartons for these eggs won’t use terms like “sell by” or “buy thru” — the language in the current law. Instead they will be marked “best by” or “use by.”

Consumers who want to be guaranteed something fresher will have to purchase Grade AA eggs. The compromise on what is HB 2464 leaves the current 24-day sell-by requirement in place for them.

But as it turns out, there’s a good chance if you’re buying jumbo eggs you won’t be able to find them in Grade AA cartons.

All of that goes to the question of what to buy.

“The main difference is the freshness of the egg,” explained Roland Mader, the dairy and egg specialist at the state Department of Agriculture.

There’s nothing wrong with a Grade A egg for many purposes, he said. And, kept properly refrigerated, there is no health reason why not to use one 45 days after packing.

But Mader said there are times when nothing but a Grade AA egg will do.

Some of it, he said, is strictly aesthetic.

You like your eggs sunny-side up?

“If you crack an egg and it is a Grade AA egg, the egg yolk stands much higher and the egg white is firmer than a Grade A egg,” Mader explained. For a Grade A, think of a less pronounced yolk and more watery white.

Ditto on using Grade AA eggs when you’re poaching them.

Still, he said, there are times when there are legitimate culinary reasons beyond appearance that someone might want a Grade AA egg.

“If you bake a cake and you want the dough to rise better, a fresher egg tends to be better to use,” Mader said.

All that will become more important if the legislation, awaiting final House approval and a gubernatorial signature, becomes law.

What’s behind all this is a desire by retailers to stop throwing away eggs. And that, in turn, goes to consumer attitudes.

Put simply, she said shoppers check out the expiration date printed on the edge of each carton. And if the date printed on the eggs in the front of the display is within several days, they’re more likely to reach further back and get something with a later expiration date.

But what that does, Ahlmer said, is leave grocers with dozens and dozens of eggs that can’t be sold after the expiration date and can’t even be given away to food banks.

“So we wind up throwing it out,” she said, estimating that retailers toss about $3 million worth of eggs a year.

Her original proposal would have allowed all eggs to remain on sale for 45 days after packaging.

That, however, drew protests from Glenn Hickman who runs the Arizona egg ranch that bears his family name. He said that after the 24th day the eggs just don’t meet that Grade AA standard of that firm yolk and egg white.

So that lead to the deal to allow retailers to sell eggs packed as Grade A and keep them on the shelves longer.

Mader said he doesn’t think that will make a difference for most eggs coming from large-scale operations, as they can get an egg from underneath a hen into a carton in less than 24 hours.

Where it’s more likely to occur, he said, is in “specialty” eggs, like those from small-scale free-range operations, where the time from hen to carton can take longer.

And about those jumbo eggs. Forget about getting them in a Grade AA carton.

Mader said that has nothing to do with freshness. Instead, it’s biology.

“As a hen ages, the eggs get bigger,” he said.

“Because of the size, the protein on the egg white tends to be a little bit more watery,” Mader continued. And he said that can easily be seen when an egg is “candled” and inspected for its internal contents.

Oh, and, for the record, it is possible to buy Grade B eggs in Arizona.

Mader said these can be eggs that have gone past their expiration date and are repackaged. That currently means older than 24 days but, with the change in law, could mean Grade A eggs older than 45 days.

He also said eggs with some flaws, including cracks, can be sold as Grade B.


The political egg-splanation of egg-spiration dates


That expiration date on the side of the dozen eggs you buy at the supermarket could soon have a bit less meaning.

More than three decades after requiring that eggs be sold within 24 days after being laid, state lawmakers are moving to loosen those restrictions to a full six weeks.

Legislation offered by Rep. Jill Norgaard, R-Phoenix, would amend existing law to say the “sell by” date could be 45 days after an egg is “candled” and still be called AA eggs, the highest standard. That’s actually longer than the U.S. Department of Agriculture permits for eggs with the agency’s label.

But eggs sold without that USDA blessing are governed by the laws of the state. And that’s precisely what Norgaard wants to change.

The impetus actually comes from the Arizona Retailers Association, the folks who market the eggs directly to consumers. Lobbyist Michelle Ahlmer said they believe there’s no reason they should have to yank the eggs from store refrigerator shelves after 24 days and dump them.

But even Ahlmer conceded that 45-day shelf life may be hard for consumers — and lawmakers — to swallow. So she said the retailers are going to offer to scale that back when HB 2464 goes to the House Commerce Committee on Tuesday.

The question is at what point eggs should not be sold to consumers.

Ahlmer says most states already allow anywhere from 30 to 45 days after being packaged. And she said while they may not be quite as fresh — perhaps the yolk doesn’t stand up as tall in the middle of the white — there’s nothing inherently wrong with them.

But Glenn Hickman, owner of the egg ranch that bears his family name, said it’s not that simple.

He said testing done by state agricultural officials when the dating law was first enacted in 1984 showed that eggs met the AA standard of firmness of the yolk and the egg white through 24 days. By Day 25, he said, one or more out of a dozen did not.

That same test, he said, was repeated three decades later and “the results were exactly the same.”

Yes, Hickman conceded, the fact that they may be less pleasing to look at does not make them unhealthy. But he said consumers are not getting what they paid for.

“Getting cheated out of a couple of ounces of gas is not unsafe or unhealthy either,” he said. “But it’s still not right.”

Mark Killian, director of the state Department of Agriculture has purview over egg-laying operations, is staying out of the legislative fray. But he said the judgment of what is “fresh” is an interesting question.

For example, he said, it’s not unusual for eggs to be kept available for sale in Europe for a month, even without refrigeration.

But Killian said it’s not that simple. He said that’s based on the eggs not being washed before being packaged.

“That’s because when the hen lays the egg she puts a coating on it,” he explained. “But once you wash the egg and wash that coating off, it has to be refrigerated.”

Ahlmer, for her part, said the legislation should be seen as working in the benefit of consumers.

“If there’s a carton of eggs or a gallon of milk or something that has an expiration date on it, and I’m shopping on Feb. 9 and it expires on Feb. 12, I’m likely to look for one that has a later expiration date,” she said.

“What happens is those that don’t get sold have to be disposed of because we can’t give them to food banks,” Ahlmer said. “So we wind up throwing it out.”

She estimated that retailers toss about $3 million worth of eggs a year. Ahlmer said, though, she did not know what percentage that is of everything offered for sale.

And there’s something else: Ahlmer said the change will “open up our market so we can get more eggs in here.”

That goes to the question of how Arizona ended up with open dating on egg cartons in the first place. And, as with this legislation, there’s as political story behind it — and an effort by someone to sell more product.

Prior to 1984 there was no Arizona law requiring there be codes on egg cartons that consumers could read to tell the freshness of the product.

Pat Wright, then a representative from Glendale, noted that many grocers were buying their eggs from California ranchers.

She figured that if eggs had to be sold within a certain number of days after being laid, that would increase the incentive to buy from a local rancher who could get them to market two or three days earlier. And that translated into more time to sell.

And while the 24-day clock was set by Carl Biehler, the state egg inspector at the time, Wright made no secret of the reason she sponsored the measure. It was to benefit Hickman’s Egg Ranch, the state’s largest producer — and coincidentally located at the time in her legislative districts.

Hickman’s has since decamped to more rural locations, with Arizona operations in Arlington, Tonopah and Maricopa.

Ahlmer, for her part, said she could make no promise that letting her retailers leave eggs for sale on grocery shelves will result in lower prices.

But she argued that some consumers who see that “sell by” date and think of it as more of a “use by” date end up throwing them out. Ahlmer said if that date on the carton is extended out, then buyers will save if for no other reason that they won’t toss them quite as quickly.